Correlation Between Salesforce and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Salesforce and AirAsia X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Salesforce and AirAsia X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and AirAsia X Bhd, you can compare the effects of market volatilities on Salesforce and AirAsia X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Salesforce with a short position of AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and AirAsia X.
Diversification Opportunities for Salesforce and AirAsia X
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Salesforce and AirAsia is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X Bhd and Salesforce is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Salesforce are associated (or correlated) with AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Salesforce i.e., Salesforce and AirAsia X go up and down completely randomly.
Pair Corralation between Salesforce and AirAsia X
Considering the 90-day investment horizon Salesforce is expected to under-perform the AirAsia X. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.06 times less risky than AirAsia X. The stock trades about -0.15 of its potential returns per unit of risk. The AirAsia X Bhd is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 186.00 in AirAsia X Bhd on October 20, 2024 and sell it today you would lose (7.00) from holding AirAsia X Bhd or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Salesforce vs. AirAsia X Bhd
Performance |
| Timeline |
| Salesforce |
| AirAsia X Bhd |
Salesforce and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and AirAsia X
The main advantage of trading using opposite Salesforce and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, AirAsia X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AirAsia X will offset losses from the drop in AirAsia X's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| AirAsia X vs. YX Precious Metals | AirAsia X vs. Star Media Group | AirAsia X vs. Central Industrial Corp | AirAsia X vs. Sapura Industrial Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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